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All that glitters w5 Genie and Helmut Vollmer invested $400,000 in The Institute for Financial Learning on the advice of their accountant Heinz Weis. The Vollmers doubt they will ever get any of that money back. The Institute for Financial Learning was run by a Calgary man named Milowe Brost held seminars offering investment advice to IFFL members, often suggesting they invest in gold mines owned by another Calgary man, Gary Sorenson. In September 2009, Calgary RCMP arrested Gary Sorenson, pictured in this undated photo, and Milowe Brost. Sorenson and Brost were charged with fraud after being accused of running a Ponzi scheme. Former financial advisor Larry Elford says the RCMP have only managed five prosecutions in financial fraud cases in the last eight years, while 90,000 frauds are occuring each year.

W5: Who is protecting your investments?

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W5: All That Glitters, part one
They made promises of huge returns on investments to Canadians looking to secure a comfortable future. W5's Victor Malarek looks at how two fraudsters were able to lure thousands into multi-million dollar Ponzi scheme.
W5: All That Glitters, part two
Thousands of investors had their lives destroyed by the Ponzi scheme orchestrated by Milowe Brost and Gary Sorenson, but is the RCMP capable of solving financial crimes of this magnitude? W5's Victor Malarek investigates.

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All that glitters w5 Genie and Helmut Vollmer invested $400,000 in The Institute for Financial Learning on the advice of their accountant Heinz Weis. The Vollmers doubt they will ever get any of that money back. The Institute for Financial Learning was run by a Calgary man named Milowe Brost held seminars offering investment advice to IFFL members, often suggesting they invest in gold mines owned by another Calgary man, Gary Sorenson. In September 2009, Calgary RCMP arrested Gary Sorenson, pictured in this undated photo, and Milowe Brost. Sorenson and Brost were charged with fraud after being accused of running a Ponzi scheme. Former financial advisor Larry Elford says the RCMP have only managed five prosecutions in financial fraud cases in the last eight years, while 90,000 frauds are occuring each year.

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Date: Sat. Oct. 1 2011 7:19 PM ET

When Genie and Helmut Vollmer's accountant introduced them to a new investment opportunity, they had no reason to doubt their financial advisor and friend of 30 years.

The Calgary seniors were told by Heinz Weis that their principal would be guaranteed, and they could earn as much as 35 per cent annual returns.

"It was more or less guaranteed money and there would be no loss," Genie Vollmer said.

Although they admit that they didn't fully understand all the intricacies of the deal, they trusted their accountant, and on his advice they invested $400,000.

"He was my accountant for thirty years and at the time I thought he was the greatest accountant in the world," Helmut Vollmer recalled.

What the Vollmers were investing in was a company called The Institute for Financial Learning. IFFL, as the company was known, claimed to teach individuals how to develop financial strategies through the restructuring of assets — re-investing money held in RRSPs and home equity. IFFL was run by a Calgary man named Milowe Brost. He held seminars offering investment advice to IFFL members, often suggesting they invest in gold mines owned by another Calgary man, Gary Sorenson.

For years the Vollmers received statements showings substantial gains on their investment. Their accountant even went on a tour of one of Sorenson's gold mines in Honduras, and reported back favourably about the investment. But the golden investment opportunity began to show signs of tarnish. Rumours started to circulate that IFFL could be a fraud.

To the Vollmer's horror, in September 2009 Calgary RCMP arrested Sorenson and Brost and charged them with fraud, The Mounties accused them of operating a Ponzi scheme, which is where the first investors are paid supposed returns by using money obtained from later investors.

Shortly afterward, the Securities Exchange Commission in the United States filed a civil suit alleging that over an eight year period as many as 3,000 to 4,000 investors across North America were defrauded of as much as $300-million. One insider has claimed that amount could be as much as $5-billion.

Under sanction but little action

W5 has learned that over a period of years, starting as early as 2000, the Alberta Securities Commission (ASC) had been investigating Sorenson and Brost or their companies.

In 2005, the ASC referred the case to the RCMP. But it took another four years for the Mounties' Integrated Market Enforcement Team (IMET) to arrest and charge Sorenson and Brost with fraud.

The Vollmers and victims like them can't help but wonder why it took so long for the authorities to shut down the alleged scheme. They suspect that had authorities acted in a timely fashion, victims like themselves could have been spared the financial and emotional burden of loosing their life savings. The family of a woman from British Columbia say that their loved one committed suicide as a result of her financial losses.

Larry Elford is a former financial advisor who has been critical of the RCMP's Integrated Market Enforcement Team—the task force designated to investigate financial fraud. Earlier this year he asked the RCMP Complaints Commission to investigate IMET, claiming that they have failed in their ability to address large and complicated financial crimes. He believes that Canadian authorities should be held responsible for failing to protect victims like the Vollmers.

"Those investors have a claim for damages against the RCMP for doing a negligent job in investigating, and against the Alberta Securities Commission for doing a negligent job as a public interest," insisted Elford. "They [investors] should get all of their money back."

Ermanno Pascutto, Executive Director of FAIR Canada, is also worried about Canada's track record for policing financial fraudsters. His organization is a consumer watchdog whose mission is to provide a national voice for investors.

FAIR Canada recently completed a study into how Canadian authorities deal with large scale complex financial scandals.

The conclusion: the whole system is dysfunctional. Pascutto looked at the Brost-Sorenson case and says that the lack of action fits a cross-country pattern.

"We've seen cases in the past where people have defrauded consumers of millions of dollars and all that's happened to them is they've been told not to do it. And they've walked away" he said.

Despite repeated requests from W5, neither the Alberta Securities Commission nor the RCMP would agree to an interview about Brost, Sorenson or IFFL.

Meantime, Genie and Helmut Vollmer have joined a class action lawsuit against Sorenson and Brost, although Helmut doubts that he and his wife will ever get their money back.

"The only satisfaction I could get out of this here, is if I could live long enough that they're behind bars" said Helmut Vollmer.


Comments are now closed for this story

Chris Bone
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I have another fraud story for you based here in Ontario, mortgage fraud, it has been going on for over 20 yrs and the perp has never been prosecuted. I have done most of the investigation myself, went to the FSCO, the IMBA, the OPP and the RCMP, none of them would touch it even though I handed it to them on a silver platter.


Chris Bone
said
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Confirming that our Attorney Generals, the RCMP, our judicial system and financial regulatory agencies such as the FSCO and ASC are doing nothing to combat fraud which is rampant in Canada. When are we going to get cops out of cruisers, off their horses, off the backs of law abiding citizens and onto the backs of fraud artists, to fight the changing face of major crimes being committed against Canadian citizens. Did you see the plush offices of the ASC??? As a victim of mortgage fraud in Ontario, I know what these people are going through. The apathy is criminal!


joan
said
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Fraud also abounds in many of the publicly traded companies. Amazing that people within these companies earn big bucks and yet never turn a profit.


Larry Elford
said
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Thank you CTV for being courageous enough to deal in difficult truths. I was part of the show, and my hope is this: Investors who have lost money need to take four steps to get their money back: (1) sue the securities commission in your province for failure to protect the public interest (2) sue the RCMP for failure to do a proper investigation (3) find a class action lawyer who is not afraid to do this if you cannot do it yourself (4) see GET YOUR MONEY BACK at www investoradvocates ca Even if you have to limit yourself to a small claims court, if hundreds of abused investors take these failed government agencies to task, something will change.


Ed in Alberta
said
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As usual: "If it seems too good to be true, it almost always is". 35% annual returns? "No loss"? Gimme a break."Greatest accountant in the world"?.....!!!????It's almost a universal truth: the only people who get scammed are those who let their greed get in the way of common sense (or is that "cents"?)


Burnt
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Great Show W%There are many other investment companies in Alberta that should be joining this one under investigation. Gibraltar Mortgage, Liberty Gate, etc., etc.The RCMP does nothing. Even after a formal written request presented in person, with a dozen affidavits in hand.The ASE plays coy and elusive. They do have the ability to sanction companies after several complaints of similar nature are filed. They seem reluctant to do so. Go to court they say.RECA seems to try to avoid conflict.with its members. No sanctions even after many complaints.Good luck to all burned investors in Alberta.You are forced to spend outrageous amounts on lawyers that achieve nothing. And the court system and court date settings control the delayed outcome, while the plaintiffs run out of money to proceed further.This matter is of very serious concern to all those who have invested locally and then found no protection or retaliation exists once the money is is in jeopardy or gone.


Annoymous
said
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They only thing that this investigative report forgot to mention is that the ASC is funded by the Investment industry, meaning traditional Mutual Fund companies and large banks. Most of the investments and companies that go under are because of the ASC does not want us (the investor) to get anything better than what the Bank or Mutual Fund companies offers in investments.Why does the ASC & RCMP not help the thousands of investors recoup their funds? Also many of those investors that lost their funds in this scheme are also under investigation from CRA. Double whammy! So who is criminal in this story?


jackgmckay
said
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Fraud of all kind are widespread in Canada and Alberta. Most are successful. I have seen a few directly. If you think the regulators are regulating you are mistaken. You must perform your own due diligence. Trust will cost you.


Janet Watson
said
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A great story on the Brost Sorenson scandal. Please keep doing this kind of story so that this issue continues to get the attention it deserves. I, along with 1300 others, was a victim in the Mount Real scandal. The similarities between Mount Real and Brost and Sorenson are astounding - lack of investigation by the RCMP, lack of oversign by the Autorite des Marches Financiers, lack of any consequences for the perpetrators, no money recovered etc. etc. Please continue to do these kind of stories. The public deserves to know that it can happen to anyone.


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